The decline in profit was largely attributed to higher costs including branding costs coupled with higher R&D expenditure. Additionally, the results also included restructuring expenses incurred as part of Lotus’s business transformation plan.
At the Group level, higher marketing and selling costs, in addition to lower domestic sales volume experienced as competitors aggressively lowered prices during the seasonal and traditionally slower year-end demand, were primary contributors to the loss of RM52 million in Q3 2010/11 compared to the profit of RM81 million recorded in the immediate preceding quarter.
Cumulative revenue as at 31 December 2010 rose to RM6.36 billion against RM5.97 billion recorded the corresponding period last year, while revenue for the individual period (Q3) dipped slightly to RM1.83 billion from RM2.01 billion the corresponding period last year.
With regard to Lotus, part of the board-approved Lotus’ business transformation plan entails a major branding exercise at various international motor shows and a restructuring exercise which includes investment on new product development, management reorganization and rationalization of its dealer network.
However, PROTON Group Chairman Dato’ Sri Mohd. Nadzmi Mohd. Salleh said the company is confident that its current strategy built on the principle of offering the right car, at the right price for the right market segment, will enable it to continue to capitalize on growing domestic sales.
PROTON’s performance in the final quarter of the 2010/11 financial year is expected to put the company back on its growth trajectory and this is supported by higher sales in January 2011 due to the delivery and introduction of the Inspira and Saga FL.
PROTON sold a total of 157,274 vehicles in 2010, with 15,805 units sold in January 2011 amidst the backdrop of a vibrant domestic car market that had grown 13% in 2010. The Malaysian Automotive Association (MAA) reported that the total industry volume (TIV) reached 605,156 units in calendar year 2010 with registration of passenger vehicles alone accounted for 543,584 units, an increase of 11.8%. The MAA is projecting TIV to increase by a further 2% while industry experts are saying growth in car sales may be as high as 4% in the calendar year 2011.
“As for Lotus, higher expenditure is expected as the company is undergoing a restructuring exercise, but we are confident that the restructuring plan is making good progress. This is further supported by future plans which includes more efficient spending, continuous manufacturing efficiency and a consolidated marketing strategy, which is mainly to instill greater public awareness of new models,” said Dato’ Seri Mohd Nadzmi.
“The Group will continue to improve operational efficiency through continuous vendor and dealer network rationalisation as well as various cost-cutting initiatives whilst at the same time investing in the development of new models, variants and technologies. On top of that, we continue to monitor our export performance closely and remain flexible in our strategic approach to suit the demands of our international clients. Holistically, PROTON remains committed to efforts which can further enhance PROTON’s overall competitiveness and we are satisfied with our progress in that area thus far and hope to share this with our key stakeholders in the near future,” he added.
On the international front, the popularity of Proton core models continue to grow, with Proton establishing itself as one of the top ten brands in Thailand. PROTON’s market share in Thailand is currently in eighth position for overall passenger car sale and tenth position for overall vehicle sales in Thailand for 2010.
The Proton Exora was also recognized as one of the top ten cars of 2010 in Thailand and as the “People’s Multi-Purpose Vehicle (MPV)” by a prestigious English newspaper in Bangkok. Launched there in December 2009, shipment of the Exora to Thailand has reached 3,125 units with almost 2,700 cars already registered as at Feb 2011. In Japan, PROTON and Japanese Manufacturer Carrosser Co. Ltd. (CUSCO) recently entered partnership to sell the Satria Neo rally cars in the Japanese domestic market.
PROTON Group Managing Director Dato’ Haji Syed Zainal Abidin Syed Mohamed Tahir said, “PROTON also remains committed to the development of its green technology in line with the Government’s initiative to make Malaysia a regional hub for hybrid, electric and environmentally-friendly vehicles. As part of this plan, the award-winning Proton Exora Extended Range Electric Vehicle (E-REV) and Saga Electric Vehicle (EV) are in the final stages of testing before being made commercially available.”
“The Malaysian economy’s projected growth of between 5% and 6% will result in positive consumer sentiment, increasing domestic demand and further growth in the TIV. And together with efforts being undertaken by PROTON, we are poised to capitalize on a more vibrant economic landscape with the introduction of new models and enhanced variants in 2011,” he added.
Article sources: proton.com
Category: News & Event
